- The price of gold recovers land on Thursday as the growing commercial tensions increase the demand for safe refuge.
- A modest USD setback from a maximum of several weeks and the fees for feat cuts of the Fed also support the Xau/USD torque.
- The operators expect the macroeconomic data of the US of Thursday to obtain a new impulse before the US PCE data on Friday.
The price of gold (Xau/USD) attracts new buyers after the flat closure of the previous day and rises to a new weekly maximum, around the 3,038-3.039 $ area during Thursday’s Asian session. The president of the USA, Donald Trump, announced a 25% tariff on imported cars and light trucks that will begin next week, expanding the global commercial war. In addition, the uncertainty about the so -called reciprocal tariffs of Trump moderates the appetite of investors by more risky assets and supports the demand of the precious metal of safe refuge.
Meanwhile, the US dollar (USD) struggles to capitalize on night profits, driven by the best publication of the expected orders of durable goods in the US, and goes back after reaching a maximum of three weeks amid moderate expectations of the Federal Reserve (Fed). This turns out to be another factor that benefits the price of gold, which does not yield. However, the recent increase in the yields of the US Treasury bonds could limit the losses of the USD and prevent operators from carrying out aggressive bullish bets around the Xau/USD couple.
What moves the market today: the price of gold receives support from a global flight to security and a modest recess of the USD
- The feeling of global risk suffered a blow to the new automotive tariffs announced by the US president, Donald Trump, Wednesday. In addition, the uncertainty about the impending Trump reciprocal tariff next week weighs on the feeling of investors and revives the demand for the traditional refuge that is the price of gold on Thursday.
- Uncertainty about the impact of Trump’s commercial policies forced the Federal Reserve to review its growth perspective. In addition, the US Central Bank said that it will deliver two interest rate cuts of 25 basic points in 2025. This eclipses the US macroeconomic data of Wednesday and weighs on the US dollar.
- In fact, the US Department of Commerce reported that requests for lasting goods increased 0.9% in February, while orders for underlying durable goods, which exclude the volatile transport sector, increased 0.7%. The readings were better than consensus estimates and took the USD to an upward movement during the night up to a maximum of three weeks.
- Chicago Fed president Austan Goolsbee told the Financial Times that he could take more time than the next cut due to economic uncertainty. If markets begin to consider higher inflation, he would see that as a great area of ​​concern for monetary policy decisions, Goolsbee added.
- In addition, the president of the Fed of Minneapolis, Neel Kashkari, argued that the Central Bank has achieved a lot of progress in reducing inflation, but will have more work to do to bring inflation back to the goal of 2%. Kashkari also said that he is not sure of the effect of Trump’s aggressive policies on the US economy.
- Separately, the president of the Fed of St. Louis, Alberto Musalem, said that there is no urgency so that the US Central Bank cuts rates since a restrictive policy is still needed to ensure that inflation falls to the objective of 2%. He expects the economic growth of the US to remain decent, while prices could be pressured up for tariffs.
- The operators now expect the US economic agenda on Thursday, which includes the publication of the final review of the GDP of the fourth quarter, the initial weekly applications of unemployment subsidy and the sales data of pending housing. This, together with the Speeches of influential FOMC members, will boost the demand of the USD and generate short -term opportunities around the merchandise.
- However, the attention will remain focused on the US Personal Consumption Expenditure Index (PCE) on Friday, which could provide some clues on the future path of fees of fees of the Fed. This, in turn, will play a key role in determining the next directional movement for the dollar and the yellow metal without performance.
The price of gold could aim to challenge the historical peak, around the area of ​​3,057-3,058 $ reached at the beginning of this month
From a technical perspective, the bullish resilience near the psychological brand of $ 3,000 and the subsequent rising movement favor the bulls amid positive oscillators in the daily chart. Therefore, some monitoring purchases should allow the price of gold to aim again to challenge the historical peak, around the 3,057-3,058 $ area reached on March 20. A sustained strength beyond this level will establish the scenario for an extension of the well -established bullish trend that has been observed during the last four months.
On the contrary, the horizontal zone of 3,020-3.019 $ could now protect the immediate fall before the 3,000 $ psychological brand. This is followed by a support near the region of 2,982-2.978 $, below which the price of gold could extend the corrective drop even more towards the following relevant support near the region of 2,956-2.954 $. The latter represents a point of horizontal resistance rupture and should act as a key point, which if it breaks could cause some technical sales and pave the path for deeper losses.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
